Stockholders' Equity and Earnings Per Common Share

9 Months Ended

Sep. 30, 2022

Stockholders' Equity and Earnings Per Common Share [Abstract]

Earnings Per Share Disclosure

Earnings Per Common Share

Net income per common share is determined as follows:

	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
	(in millions of dollars, except share data)
Numerator
Net Income	$	410.7	$	328.6	$	1,034.6	$	664.5
Denominator (000s)
Weighted Average Common Shares - Basic	200,035.3		204,645.8		201,262.3		204,429.6
Dilution for Assumed Exercises of Stock Options and Nonvested Stock Awards	1,614.9		496.5		1,256.7		623.3
Weighted Average Common Shares - Assuming Dilution	201,650.2		205,142.3		202,519.0		205,052.9
Net Income Per Common Share
Basic	$	2.05	$	1.61	$	5.14	$	3.25
Assuming Dilution	$	2.04	$	1.60	$	5.11	$	3.24

We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding for the period. In computing earnings per share assuming dilution, we include potential common shares that are dilutive (those that reduce earnings per share). We use the treasury stock method to account for the effect of outstanding stock options, nonvested stock success units, nonvested restricted stock units, and nonvested performance share units on the computation of diluted earnings per share. Under this method, the potential common shares from stock options, nonvested stock success units, and nonvested restricted stock units will each have a dilutive effect, as individually measured, when the average market price of Unum Group common stock during the period exceeds the exercise price of the stock options and the grant price of the nonvested stock success units and nonvested restricted stock units. The outstanding nonvested stock success units and nonvested restricted stock units have grant prices ranging from $12.45 to $39.82. There were no outstanding stock options as of September 30, 2022. Potential common shares from performance based share units will have a dilutive effect as the attainment of performance conditions is progressively achieved during the vesting period. Potential common shares not included in the computation of diluted earnings per share because the impact would be antidilutive were de minimis and 0.1 million for the three and nine months ended September 30, 2022, respectively. There were approximately 1.3 million and 1.1 million potential common shares that were antidilutive for the three and nine months ended September 30, 2021, respectively.

Stockholders' Equity Disclosure

Common Stock

As part of our capital deployment strategy, we may repurchase shares of Unum Group's common stock, as authorized by our board of directors. During the first nine months of 2021, we did not have an open share repurchase program and did not repurchase any shares. During October 2021, our board of directors authorized the repurchase of up to $250.0 million of Unum Group's outstanding common stock through December 31, 2022, with the timing and amount of repurchase activity to be based on market conditions and other considerations, including the level of available cash, alternative uses for cash, and our stock price.

Common stock repurchases, which are accounted for using the cost method and classified as treasury stock until otherwise retired, were as follows:

	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
	(in millions of dollars, except share data)
Shares Repurchased (000s)	1,164.8		—		4,243.4		—
Cost of Shares Repurchased1	$	42.6	$	—	$	137.5	$	—

1Includes a de minimis amount and $0.1 million of commissions for the three and nine months ended September 30, 2022.

In February 2022, we entered into an accelerated share repurchase agreement with a financial counterparty to repurchase $50.0 million of Unum Group's common stock in aggregate. As part of this transaction, we paid $50.0 million to the financial counterparty and received an initial delivery of 1.3 million shares of our common stock, which represented approximately 75 percent of the total delivery under the agreement. We simultaneously entered into a forward contract indexed to the price of Unum Group common stock, which subjected the transaction to a future price adjustment. Under the terms of the share repurchase agreement, we were to receive, or be required to pay, a price adjustment based on the volume weighted average price of Unum Group common stock during the term of the agreement, less a discount. Any price adjustment payable to us was to be settled in shares of Unum Group common stock. Any price adjustment we would have been required to pay would have been settled in either cash or common stock at our option. The final price adjustment settlement, along with the delivery of the remaining shares, occurred in April 2022, resulting in the delivery to us of 0.4 million additional shares. In total, we repurchased 1.7 million shares pursuant to the February 2022 accelerated share repurchase agreement. During the three and nine months ended September 30, 2022, we repurchased 1.2 million and 2.5 million shares, respectively, in open market transactions at a cost of $42.6 million and $87.5 million, respectively. As of September 30, 2022, the remaining repurchase amount under the current share repurchase program was $62.5 million.

Preferred Stock

Unum Group has 25.0 million shares of preferred stock authorized with a par value of $0.10 per share. No preferred stock has been issued to date.